Comprehensive Business Environment Analysis: Thomson Airlines Report

This report provides a comprehensive analysis of the business environment surrounding Thomson Airlines. It begins by examining how different economic systems allocate resources, with a specific focus on the UK's mixed economy and its impact on the airline. The report assesses the influence of fiscal and monetary policies, such as interest rates, exchange rates, and tax rates, on Thomson Airlines' operations and profitability. Furthermore, it evaluates the impact of macroeconomic policies, including competition and regulatory policies, on the airline's activities. The analysis extends to market structures, explaining perfect competition, monopoly, and oligopoly, and determining the pricing and output decisions relevant to Thomson Airlines' oligopolistic market presence. The report also explores how market forces, such as supply and demand and customer perceptions, shape the airline's behavior and how business strategies such as joint ventures and outsourcing affect its performance. The significance of international trade is discussed, along with an analysis of global factors like pollution control norms and passenger safety regulations, and the impact of European Union policies, including the Single European Sky Policy and the European Aviation Safety Policy, on Thomson Airlines' operations. The report concludes by summarizing the key findings and implications for the airline's strategic approach to both domestic and international markets.

Business Environment
'Analysis of Thomson
airlines

TABLE OF CONTENTS
Table of Contents.............................................................................................................................2
Introduction......................................................................................................................................2
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................3
2.1 Explain how economic systems attempt to effectively allocate resources............................3
2.2 Assess the impact of fiscal and monetary policy on Thomson airlines activities..................3
2.3 evaluate the impact of 2 macroeconomic policies on Thomson airlines activities................3
TASK 3............................................................................................................................................4
3.1 Explain 3 different types of market structure and determine the pricing and output
decisions of Thomson airlines.....................................................................................................4
3.2 The Thomson airlines behaviour is shaped by market forces...............................................4
3.3 Judge how Thomson airlines is shaped by the business strategies........................................5
4.1 Discuss the significance of international trade to Thomson airlines.....................................5
4.2 Analyze the impact of 2 global factors that impact on Thomson airlines.............................6
4.3 Evaluate the impact of 2 European Union policies on Thomson airlines..............................6
CONCLUSION................................................................................................................................7
REFERENCE...................................................................................................................................7
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INTRODUCTION
Business environment refers to a sum total of all the factors that affect the working of any
company (Belobaba, Barnhart and Odoni, 2009). This includes micro as well as macro
environmental factors. In this regard, the chosen company for the study is on Thomson Airways
Limited that has been regarded as one of the largest charter airline which offers scheduled and
charter flights to passengers. It has flights to destinations like Africa, Asia and North America
(About us, 2015). Hence the present study has made an attempt to understand the business
environment of Thomson airlines. This is related to understanding how it has been able to
effectively allocate resources followed by assessing the impact of policy on organization’s
activities. Focus has further been given on the market and global force that has shaped its
presence followed by analyzing the importance of international trade for its operations.
TASK 1
In ppt
TASK 2
2.1 Explain how economic systems attempt to effectively allocate resources
Different economic systems have got varied processes by which they are able to allocate
the resources in the best possible manner. For example, market economy tries to allocate the
resources by having a full right over the production of goods and services (Allgood and Walstad,
2013). On the other hand, Command economy carries out resource allocation by making the
decisions with respect to quantity as well as quality of products and services. While in case of
mixed economy, allocation of resources is done through the firms that produce goods and
services. However, rules and regulations are made by government (Lu, 2009). UK has a presence
cue of mixed economy hence Thomson airlines allocates resources but on the basis of policy
framework of government.
2.2 Assess the impact of fiscal and monetary policy on Thomson airlines activities
Fiscal and monetary policies impact the working of Thomson airlines in many ways. For
example, change in interest rate may lead to rise in fare prices. It may thus affect demand of
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airlines thereby impacting the profitability of Thomson airlines. In the same way, exchange rate
fluctuation changes the consumer earning. IF earning decreases then consumers do not travel in
airlines (Nakano and et.al., 2009). It thus impacts sales of Thomson airlines. In the same way,
Change in tax rate leads to fluctuation in prices of seats in airlines. This may provide advantage
or a disadvantage to the company. For example, reduction in the tax rate gives benefit to all
stakeholders.
2.3 evaluate the impact of 2 macroeconomic policies on Thomson airlines activities
2 macroeconomic policies are inclusive of Competition policy as well as regulator policy
that may impact working of Thomson airlines. Role of competition policy is to make sure that all
the airlines are able to function properly without restricting the working of others (Arai, 2004).
Hence, Thomson airlines have to adhere with the norms and should not try to possess excessive
market power over other players. In the same way, regulatory policy has to be adhering with
Thomson airlines in the area of maintaining emission standards. If the company does not adhere
with the same then it may have to face legal proceedings against it (Belobaba, Barnhart and
Odoni, 2009). Hence the airlines are required to abide by the emission norms.
TASK 3
3.1 Explain 3 different types of market structure and determine the pricing and output decisions
of Thomson airlines
There is a presence of varied market structure being perfect competition, monopoly, and
oligopoly. Perfect competition is where organizations are competing with each other on all
levels. Hence the prices are set and output is determined as per the decisions taken by industry
standards. Next comes monopoly where a single organization has a command over others. Here,
that company controls the price setting as well as output (Caprotti, 2012). Other firms are merely
the followers. In case of oligopoly pricing is decided on the basis of a few top players present in
the industry. In terms of BA there is a presence of oligopoly market structure due to its
operations in UK. Hence there is absence of any conflict with respect to price. But when a slight
modification is done by one company then others follow the same.
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3.2 The Thomson airlines behaviour is shaped by market forces
There is a presence of many market forces that she the behavior of Thomson airlines.
These include;
1. Supply and demand: If there is a rise in demand of airlines due to festive season like
Christmas, then Thomson airlines has to increase its supply accordingly. At times it may
start to increase prices so as to set profits as well as mange demand (Jun, 2009). In the
same way, if there is a decrease in demand on account of terrorist attack in UK then
Thomson airlines will have to make an attempt to lure consumers towards its services.
2. Customer’s perceptions and actions: Consumers have a presence of fluctuating buying
attitude. For example, there perception may vary as per image of Thomson airlines. If it
maintained a green image then consumers are likely to get attracted towards it. On the
other hands if it maintain it in the area of premium airlines then the company may get
demand from elite consumers (Carrere, 2014).
3. Pricing decisions: The pricing decisions undertaken by company put impacts on its
operations. If Thomson airlines adhere with the industry standards then it may have an
average demand from consumers. However, if it may reduce its fares then company may
garner consumers but suffer an image of declined quality.
3.3 Judge how Thomson airlines is shaped by the business strategies
Working of Thomson airlines is impacted by many business strategies. For example, if its
undertakes a joint venture with any company then the impact may be positive in terms if
increased efficiency. In the same way, if the company decisions to outsource its services, then
the management may get a tine t focus on core business. This strategy may be advantageous
(Jenica, Mihai and Sorin, 2010). A change in technology may lead to inefficiency in working on
company for a short time span. However, productivity may increase in later stages.
4.1 Discuss the significance of international trade to Thomson airlines
International trade has been advantageous s as well as disadvantageous to company in many
accords, Due to presence of international trade to Thomson airlines has been able to garner
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consumers from other nations. It has thus been able to keep globalized presence; the international
trade has further given a chance to Thomson airlines for increasing its business in other nations.
However, the company may face issue if it is unable to understand the overall policies and
governmental standards practiced by other nations.
4.2 Analyze the impact of 2 global factors that impact on Thomson airlines
The airlines have been impacted by pollution control norms that are introduced by the
UK government. In this regard, company has to undertake fuel check and maintain the pollution
that is emitted from its airlines. It may further have to remove those airlines that are emitting too
much pollution and have crossed the lifer span. The UK government is also concerned about
passenger safety. Hence, airliners have to adhere with the safety norms (Lamers and et.al., 2012).
It has to make sure that passengers undergo frequent checks. Their luggage is also checked
properly. In case of any discrepancy, the airlines have a right to withhold the passenger from
being a part of the flight.
4.3 Evaluate the impact of 2 European Union policies on Thomson airlines
EU POLICIES Advantage for Thomson airlines Disadvantage for Thomson
airlines
The Single European Sky
Policy
This policy may assist the airlines to
meet the future demand of
company. It may further make it
technologically sound.
Adhering with the policy may
put undue pressure on the
airlines in terms of enhanced
workload in employees.
The European Aviation
Safety Policy
Company can enhance its overall
brand image by ensuring that it
adheres with all the safety practices.
There may be a need to ensure
increased monitoring which
may not be favored by all the
consumers.
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CONCLUSION
The report has concluded that Thomson airlines have got a major presnce3 in UK and
thus we required to adhere with the regulatory and legal norms of the same. But with the
expansion of international trade, there is a need for capturing the consumers as well as markets
all over the world. In this regard, it is expected to adhere with global factors that influence its
overall business operations. This may help to meet out the areas at domestic as well as at
international level.
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REFERENCE
Journals and Books
About Thomson. 2015. [Online]. Available
through:<http://www.thomson.co.uk/editorial/legal/about-thomson.html>. [Accessed on
17th December 2015].
About Us. 2015. [Online]. Available through:<http://www.thomson.co.uk/flight/>. [Accessed on
17th December 2015].
Allgood, S. and Walstad, W., 2013. How Economists Allocate Time to Teaching and Research.
American Economic Review. 103(3). pp.654-658.
Arai, K. 2004. An Airline Merger in Japan: A Case Study Revealing Principles of Japanese
Merger Control. Journal of Industry, Competition and Trade. 4(3). pp.207-222.
Belobaba, P., Barnhart, C. and Odoni, A. (2009). The global airline industry. Chichester: Wiley.
Caprotti, F., 2012. Environment, Business and the Firm. Geography Compass. 6(3). pp.163-174.
Carrere, C., 2014. Regional Agreements and Welfare in the South: When Scale Economies in
Transport Matter. Journal of African Economies. 23(3). pp.321-345.
Competition Policy: Introduction. 2005. [Online]. Available
through:<http://www.eco.uc3m.es/~acabrales/teaching/2005/1IntroductionCompetitionLa
w.pdf>. [Accessed on 17th December 2015].
Jenica, p. A., Mihai, D. and Sorin, A., 2010. Using Lean Six Sigma as a motivational tool for
process improvement. Annals of the University of Oradea, Economic Science Series.
19(2). pp. p438-442.
Jun, H.U., 2009. Thinking on the Improvement of Testing Methods for Business English [J].
Journal of Education Institute of Taiyuan University. 3. pp. 013-019.
Lamers, p. and et.al., 2012. Developments in international solid biofuel trade—An analysis of
volumes, policies, and market factors. Renewable and Sustainable Energy Reviews.
16(5). pp. 3176-3199.
Lu, C., 2009. The implications of environmental costs on air passenger demand for different
airline business models. Journal of Air Transport Management. 15(4). pp. 158-165.
Nakano, S. and et.al., 2009. The Measurement of CO2 Embodiments in International Trade.
Thomson airways. 2015. [Online]. Available
through:<http://www.thomson.co.uk/editorial/legal/baggage-allowance.html>. [Accessed
on 17th December 2015].
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